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Jamaican privatisation brings in Chinese company

30 August 2010

At the beginning of August the Jamaican government signed an agreement with a Chinese company, China National Complete Plant Import & Export Co Ltd (Complant), for the sale of ‘Jamaica’s three largest plants – Frome, Monymusk and Bernard Lodge’ for US$9 million, a commitment to invest US$127 million, the leasing of ‘approximately 30,000 hectares of cane lands at a rate of US$35 per hectare per annum for 50 years… renewable for an additional 25 years’ and a commitment to conduct a feasibility study for ‘the construction of a sugar refinery and ethanol facility’. The company, an investment arm of the government of the People’s Republic of China, already has construction interests in Jamaica. The three mills which have been loss-making enterprises for more than three decades, will only be taken over at the end of the 2010-11 season, so as to enable the Jamaican government to fulfil a forward-sales agreement with Tate & Lyle for 100,000 tonnes of sugar.

This completes the sale of government-owned sugar plants in Jamaica, following the sale in 2009 of ‘two other state-owned factories, Duckenfield and Long Pond to private local buyers’.

Editorial comment

It is unclear what the impact of the sale of these three estates to a Chinese company will be in terms of the export markets served by Jamaican sugar production. The desire to defer a formal takeover until the Jamaican government had fulfilled its contractual commitments to Tate & Lyle, in the context of a previous commitment to buy from private companies if a shortfall in supply emerged, suggests that a reorientation of export sales may occur.

Certainly, the entry of a state-owned Chinese company into the Jamaican sugar sector may sit uneasily with increasingly concentrated ownership structures in the EU and the recent purchase of Tate & Lyle’s sugar division by a Cuban-American owned company. However, the Jamaican government has now fulfilled its long-stated objective of divesting these loss-making assets, a goal articulated in their Sugar Adaptation Strategy and supported by the EU. The fulfilment of this objective should now allow the smooth deployment of sugar protocol accompanying measures support in the form of budgetary support.


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